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Why Would a Company WANT to Be in Your Key Account Program?

Posted on  30 March 10  by 



By Todd Burner

If you asked 10 of your best customers why they would want to be in your key account program, would you get the same answer from each customer?

And would you get an answer that included any reason other than “access to a bigger discount?”

What seems like a question that should produce a single, consistent, non-discount-focused answer can, in reality, generate a wide range of answers from customers (this helps explain why key account programs get torn down and rebuilt every 3 to 5 years due to underperformance).

The problem with most key account programs comes down to this: suppliers can’t say what’s in it for their customers beyond a bigger discount, and therefore neither can their customers.

When building a key account program, most companies make the mistake of thinking about what they want to get out of the key account program as opposed to thinking about what’s in it for the customer. 

The benefit for the sales organization is clear: more revenue.  Organizations then go looking for customers where “we should be able to sell them a lot more stuff,” and leave it to the customer to figure out what’s in it for them.

The key to building a successful key account program is communicating to the customer a clear and compelling value proposition as to why they would want to be in your key account program.

The specific value proposition your key account program offers needs to meet three criteria:

  • Create meaningful and tangible value for your customer as evaluated from the customer’s perspective, not the supplier’s perspective
  • Represent a capability that you as the supplier are uniquely positioned to provide
  • Represent a capability that you can scalably provide across customers at attractive margins

Examples of specific value proposition components include:

  • Provide privileged access to product and service innovations
  • Deploy scarce organizational resources to solving customer problems
  • Streamline coordination through a single point of contact for the customer

Once you have determined the right value proposition, you need to regularly communicate it to your customers so that they understand the value of the investments you are making in them.  As one sales executive put it: “If we don’t verbally assign value to the components of our key account program, neither will our customers.”

To learn more about how the Sales Executive Council can help improve the performance of your key account program, click here.

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